## Facts

- Rockland Industries, a Maryland manufacturer, sold a drapery lining fabric marketed as “Trevira Blackout FR” to Schmitz-Werke, a German fabric company.
- Rockland’s representatives told Schmitz that Trevira was particularly suited as a base cloth for transfer printing.
- Schmitz planned to have the fabric transfer-printed by PMD, a German company specializing in transfer printing, and Rockland knew Schmitz would use PMD rather than print in-house.
- Schmitz purchased a small test quantity, had PMD test it, and then placed larger orders after being mostly satisfied.
- When PMD processed larger quantities using its ordinary transfer-printing method, the fabric performed poorly and produced serious printing defects.
- Schmitz attempted to return the fabric; the parties’ negotiations failed.
- Schmitz sued in the District of Maryland alleging breach of a fitness-for-particular-purpose warranty under the CISG; Rockland counterclaimed regarding rescission of an earlier settlement and repayment.
- After summary-judgment rulings and a bench trial, the district court entered judgment for Schmitz on the CISG warranty claim and for Rockland on its counterclaim.
- Rockland appealed only the judgment for Schmitz on the CISG claim.

## Issues

1. Whether Rockland’s assurances and knowledge of Schmitz’s intended use created a fitness-for-particular-purpose obligation under CISG Article 35(2)(b).
2. Whether Schmitz had to prove, through expert testimony, the specific technical cause of the fabric’s failure to establish nonconformity.
3. Whether the evidence supported a finding that Schmitz reasonably relied on Rockland’s skill and judgment regarding suitability for transfer printing.

## Decision

- The Fourth Circuit affirmed the judgment for Schmitz on its CISG warranty claim.
- The court held that Rockland’s marketing statements and knowledge of Schmitz’s intended transfer-printing use supported liability under CISG Article 35(2)(b).
- The court agreed that Schmitz could prove breach by showing the fabric failed when used for the known purpose under an ordinary and competent process, without proving the precise defect mechanism.
- The court upheld the finding that Schmitz relied on Rockland’s assurances and that such reliance was reasonable.
- Rockland’s counterclaim judgment was not challenged on appeal and remained in place.

## Legal Principles

- Under CISG Article 35(2)(b), goods are nonconforming if not fit for a particular purpose made known to the seller at contract formation, unless the buyer did not rely or reliance was unreasonable.
- A seller’s specific assurances about suitability for a disclosed end use may establish the relevant particular-purpose expectation under Article 35(2)(b).
- Proof of nonconformity under Article 35 may be satisfied by evidence that, in ordinary and competent use for the known purpose, the goods fail to perform as warranted; technical identification of the defect’s cause is not required in every case.
- Reliance may be found reasonable where the seller is the manufacturer and affirmatively represents that the goods are suitable for the buyer’s disclosed application.

## Conclusion

The Fourth Circuit affirmed liability under CISG Article 35(2)(b) because the seller promoted the fabric as suitable for the buyer’s disclosed transfer-printing purpose, the buyer reasonably relied on those assurances, and the buyer proved breach by showing failure under ordinary, competent transfer printing without needing to establish the defect’s precise technical cause.


Schmitz-Werke GmbH & Co. v. Rockland Indus., Inc., 37 F. App'x 687 (4th Cir. 2002)